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Seoul: Shares shed gains on profit-taking; won sharply lower

[SEOUL] South Korean shares reversed early gains to drift lower on Monday morning on profit-taking by offshore investors wary of recent volatility in the local currency.

The Korea Composite Stock Price Index (KOSPI) was down 0.08 per cent at 1,974.52 points as of 0220 GMT.

Foreign investors sold a net 72.5 billion won (US$67.83 million) of shares on main bourse by late morning, spooked by exchange rate-associated losses with the South Korean having tumbled nearly 5 percent against the dollar over a one-month period.

Offshore players have dumped a net 565.3 billion won (US$528.91 million) of equities in the two previous sessions and nearly 1.4 trillion won in the last three weeks.

Market voices on:

"The ripple effects of a strong dollar should provide the last significant hurdle for stocks, with robust US economic data and healthy export growth to China laying a solid floor at current levels," said Oh Seung-hoon, an analyst at Daishin Securities.

Automakers were Monday's top performers, as Hyundai Motor rose 3.1 per cent while Kia Motor gained 2.7 per cent, with a softer won easing price pressure against their Japanese competitors.

Shares with links to North Korea spiked on signs of warming relations between the two Koreas. Hyundai Elevator, which owns part of the company in charge of tourism in the North, jumped 15 per cent, the daily price change limit. Hyundai Merchant Marine, another shareholder, soared 14.7 per cent.

Chipmaker SK Hynix tumbled 4.1 per cent after industry rival Samsung Electronics said it was investing US$14.7 billion in a new chip-production plant. Samsung shares were up 0.4 per cent on the news.

The South Korean won fell sharply on Monday to touch a 6-month low, in line with the dollar's gains as stellar US employment data added fresh momentum to the greenback's recent bull run.

The local currency was quoted at 1,069.6 to the dollar as of 0220 GMT, compared to Thursday's close of 1,061.4.

South Korean financial markets were closed on Friday for a holiday. - Reuters